| Wed 27 Feb 2008, 7:58 | | MVG / MVGP - Mvelaphanda Group - Unaudited Interim Results For The Six |
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MVG / MVGP - Mvelaphanda Group - Unaudited Interim Results For The Six
Months Ended 31 December 2007 and dividend declaration
Mvelaphanda Group Limited
(Incorporated in the Republic of South Africa)
Registration number 1995/004153/06
Ordinary share code: MVG
Preference share code: MVGP
Ordinary share: ISIN: ZAE000060737
Preference share: ISIN: ZAE000073540
("Mvela Group" or "the company" or "the Group")
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
Key features
- Revenue increased by 1% to R1,7 - Acquisition of an interest of
billion or 12% on a comparable 12,3% in Vox Telecom
basis
- Operating profit increased by 3% - Further buy back of 16,5 million
to R125 million ordinary shares for a total
cost of R177 million
- Intrinsic net asset value per
ordinary share at 31 December 2007
R11,64 (2006: R13,05)
notwithstanding the solid
performance of investments:
- Absa Group (19,6% growth in
headline earnings for the year
ended 31 December 2007);
- Group Five (80% growth in
headline earnings per share for
the six months ended 31 December
2007); and
- Life Healthcare (19% compound
annual growth in EBITDA over the
past three years)
Yolanda Cuba, CEO of Mvela Group commented: "The six months under review was
characterised by solid progress on the operational front with a strong
turnaround underway at Protea Coin.
The downturn in equity markets has impacted negatively on the carrying value
of our investments in Absa Group, Life Healthcare and Group Five. We are
however confident that the underlying operations of these investments will
continue to perform well and recover in value over the medium to long term.
Our strong balance sheet and healthy cash flows from operations as well as
available cash resources places us in a strong position to pursue value
enhancing investment opportunities through acquisitions and share buy-backs
to further improve shareholder returns."
Enquiries
Mvela Group 011 290 4200
Yolanda Cuba
College Hill 011 447 3030
Johannes van Niekerk 082 921 9110
Nandile Ngubentombi 082 825 8004
The following are the unaudited results of Mvela Group and its subsidiaries
("the Group") for the six months ended 31 December 2007 with comparative
figures.
Overview
During the six months under review, Mvela Group acquired a further 16 537
132 Mvela Group shares at a cost of R177 million as part of its share buy-
back programme.
The Group acquired a 12,3% interest in Vox Telecom for a consideration of
R293 million. The acquisition of the first tranche of 25,5 million shares or
2,5% was concluded before 31 December 2007.
Intrinsic net asset value per ordinary share, which is considered to be the
most insightful measure of the Group`s overall performance, decreased by
R1,41 or 10,8% to R11,64 at 31 December 2007 from R13,05 at 31 December
2006. The intrinsic net asset value at 30 June 2007 was R14,10.
The decrease is mainly due to the devaluation in the Absa Group share price
and a more conservative approach adopted in the valuation of Life Healthcare
and the Group`s operations in line with depressed equity markets. The effect
of the decrease in cash on the intrinsic value per share is partly offset by
the investment in Vox Telecom and the decrease in the issued number of
ordinary shares after share buy-backs. Details of the calculation of the
intrinsic net asset value per share are set out below:
31 December 2007 31 December 2006 30 June 2007
Intrinsic Per share Intrin Per share Intrinsic Per
net asset (2), (5), sic (3), (5), net asset share
value (1) (6) net (6) value (1) (4),
asset (5), (6)
value
(1)
R m R R m R R m R
Absa 1 366 2,88 1 675 3,37 1 786 3,66
Life 1 332 2,81 1 223 2,46 1 502 3,07
Healthcare
Group Five 457 0,96 240 0,48 465 0,95
Vox Telecom 61 0,13 - - - -
Others 56 0,11 20 0,04 38 0,08
Operations 1 501 3,16 1 956 3,94 1 787 3,67
Net cash 753 1,59 1,372 2,76 1 304 2,67
Total 5 526 11,64 6 486 13,05 6 882 14,10
Notes:
1 Intrinsic net asset value is calculated based on the market value or
directors` valuation of investments and operations, net of capital gains
tax and associated debt
2 Based on the diluted net number of 474 million ordinary shares after
share buy-backs at 31 December 2007
3 Based on the diluted net number of 497 million ordinary shares after
share buy-backs at 31 December 2006
4 Based on the diluted net number of 488 million ordinary shares after
share buy-backs at 30 June 2007
5 Based on the assumption that all the preference shares will be converted
into ordinary shares after November 2009
6 The redeemable option holding shares issued in June 2007 have not been
taken into account in calculating the intrinsic net asset value per
ordinary share as the minimum option strike price of R17,50 is greater
than the current Mvela Group ordinary share price
Mvela Group ordinary shares were trading at a discount of 11,9% to Mvela
Group`s intrinsic net asset value per share based on the ordinary share
price on the JSE Limited ("JSE") of R10,25 on 31 December 2007. If the cash
component of the intrinsic net asset value is excluded, the discount at
which Mvela Group ordinary shares traded to its intrinsic net asset value
per share at 31 December 2007 increases to 13,8%.
The Group`s cash resources remain strong with a cash balance of R804 million
at 31 December 2007.
Investments
Financial Services Sector
The share price of Absa Group decreased from R125 per share at 31 December
2006 to R111 per share at 31 December 2007 in line with its peers in the
banking sector. This decrease of 11% in the Absa Group share price resulted
in a decrease of R309 million in the intrinsic value (net of Capital Gains
Tax ("CGT") and debt) of Mvela Group`s effective interest in Absa, to R1 366
million at 31 December 2007. The fair value adjustment on Absa in the Income
Statement during the current six month period was R504 million before
accounting for CGT and minority interests. Mvela Group`s investment in Absa
comprises 24,7% of Mvela Group`s intrinsic net asset value at 31 December
2007. The underlying operations of Absa performed well with a 19,6% growth
in headline earnings for the year ended 31 December 2007.
Financial services is a key pillar in Mvela Group`s strategy and the Company
will continue to look for opportunities in this sector.
Consumer Services Sector
Life Healthcare performed well and in line with expectation for the period
ended 31 December 2007. Life Healthcare produced an EBITDA of R1.33 billion
in its South African hospital business in the year to September 2007. The
hospital business contributes approximately 90% of Life Healthcare`s
earnings.
A more conservative approach has been adopted in the valuation of Life
Healthcare in line with weaker equity markets.
The intrinsic value (net of CGT and debt) of Mvela Group`s effective
interest in Life Healthcare increased by 9% from R1 223 million in December
2006 to R1 332 million at 31 December 2007. The fair value adjustment on
Life Healthcare in the Income Statement for the six months under review
amounted to R123 million. Mvela Group`s investment in Life Healthcare
comprised 24,1% of Mvela Group`s intrinsic net asset value at 31 December
2007.
Construction and Infrastructure Sector
The intrinsic value of Mvela Group`s investment in Group Five increased from
R240 million at 31 December 2006 to R457 million at 31 December 2007 with
the Group Five share price increasing from R46 at 31 December 2006 to R55 at
31 December 2007. This resulted in an increase of the option valuation from
R26,80 to R37,12 per option.
Telecoms, Media and Technology Sector
The Group acquired 137 500 000 Vox Telecom shares representing a 12,3%
interest for a consideration of R293 million in line with the Group`s
strategy to invest in the telecoms, media and technology sector. This
deliberate approach to acquire a small interest in a niche telecom company
was to ensure that the risk to Mvela Group shareholders is minimised. Of the
aforementioned purchase, 27 500 000 shares were acquired before 31 December
2007 at a price of R2,15 per share. The Vox Telecom share price on the JSE
at 31 December 2007 was R2,25, resulting in an intrinsic value of R61,5
million (net of CGT and debt). The balance of 110 000 000 Vox Telecom shares
was acquired during January 2008. Vox Telecom is a leading alternative,
independent telecommunications operator focusing on the provision of voice
and data services to the telecommunications market. Vox Telecom is ideally
positioned to benefit from the further development of the South African
telecom industry.
The Group entered into a transaction with Allan Gray Fund Managers ("Allan
Gray") to acquire 25,5% of Opco, Avusa`s (formerly known as Johncom) media
and operating company ("Opco transaction"). The Opco transaction has not yet
become effective. Avusa is a strategic holding for Mvela Group. It provides
the Group with a platform for participation in the media sector. Avusa has a
unique range of leading media and entertainment assets that cannot be easily
replicated. Mvela Group`s interest in Avusa will entitle the Company to
appoint three directors to the Avusa board. This will ensure that Mvela
Group has significant strategic influence over the investment.
Shareholders are referred to the announcements released on SENS by Mvela
Group on 30 October 2007 and 27 November 2007 respectively relating to the
Opco transaction, and to the announcement released on SENS by Avusa on 25
February 2008 relating to the unbundling process of Opco and its separate
listing on the JSE. Avusa indicated in its announcement that inter alia Opco
will subject to the fulfillment of various conditions precedent list on the
JSE on 31 March 2008.
One of the conditions precedent to the Opco acquisition was the formation,
unbundling and listing of Opco by no later than 29 February 2008.
Shareholders of Mvela Group are hereby advised that Mvela Group and Allan
Gray have subsequently reached an agreement to extend the date of this
condition precedent to beyond 29 February 2008 in order for their agreement
to accommodate the Opco process as managed by Avusa.
Operations
The Group`s operating businesses performed ahead of the corresponding
period, a key feature being the improvement in the operating performance of
the security businesses. The Group has invested significant capital into
certain of the operations, with a view to increasing capacity across its
operations.
Revenue for the current period increased by 1% to R1 699 million. On a
comparable basis, revenue increased by 12% if the revenue of Rebhold
Distribution Services is excluded from the prior period. Rebhold
Distribution Services is classified as an investment in the current period
after 60% of the business was sold in July 2007.
Profit from operations increased by 3% from R122 million in the
corresponding period to R125 million in the current period. If losses of R12
million relating to the legacy Coin Security business are added back,
current period profit from operations would have increased by 13% to R137
million compared to the corresponding period. The operating margin for the
operations as a whole was 7,4% for the current period (31 December 2006:
7,2%). If the legacy Coin Security losses are added back, the margin
increases to 8,1% for the current period.
Although the annualised profit before tax from operations increased, a lower
price/earnings ratio was applied in line with depressed equity markets in
the determination of the intrinsic value per ordinary share attributable to
the operations, resulting in a decrease to R3,16 at 31 December 2007 (31
December 2006: R3,94).
Cash generated from operations amounted to R63 million compared to the R59
million generated in the comparable period. Cash used for capital
expenditure in the current period, excluding R31 million utilised for the
purchase of computer software in TFMC and manufacturing rights in King Pie,
amounted to R120 million against R105 million for the corresponding period.
R65 million of the aforementioned R120 million capital expenditure is
attributable to the replacement of assets with the balance of R60 million
being utilised in the expansion of operations. R67 million of the R120
million of capital expenditure was financed from asset-based finance
resources with the balance being funded from existing cash resources.
Facilities management
Facilities management contributed 28% to the Group`s revenue (31 December
2006: 28%), delivering a performance in line with expectation and its
performance in the prior period.
Facilities management is centered around TFMC, the leading facilities
management company in South Africa. Its largest client is Telkom, where
comprehensive facilities management services are provided in respect of 6
500 properties, 14 000 masts and all ancillary telecommunications
infrastructure, totaling approximately 2,5 million square metres. Many of
these facilities are mission critical for Telkom and are maintained on a 24-
hour 365-days per year basis off the base of world-class technology and
systems. Negotiations are in progress to bring forward the renewal of the
Telkom contract.
TFMC, which had bought LGMSA during the previous period, could not reach
agreement on revised commercial terms with its major client, South African
Airways and this contract was thus terminated. The remaining contracts of
LGMSA (renamed TFMC Services) performed in line with expectation.
Security services
The security business contributed 32% to Group revenue (31 December 2006:
26%). Revenue increased by a pleasing 22% to R543 million for the period,
making it the biggest business in the Group ranked by revenue.
The merger of the Group`s security businesses into the Protea Coin Group
shows early signs of success, with the legacy Coin Security businesses
returning to break-even during the period, while the legacy Protea Security
Services businesses continue to generate operating margins in excess of the
industry benchmarks as a result of its superior mix of security services.
The Protea and Coin businesses have been fully integrated operationally and
we look forward to further improved results from the combined business for
the six month period to 30 June 2008.
Cash heist costs of R12 million were written off in the current period in
the legacy Coin Security business from heists which took place during the
previous financial year. If these costs are added back to the current
period, the security business showed an improvement in operating profit of
19% over the corresponding period.
A major challenge in this business is to improve the operating margin earned
on the approximately R1,0 billion annualised revenue base. Current margins
are around of 3,5% which is some way off the target margin of 8%. Action is
being taken to improve these margins.
Catering and cleaning services
This division consists of RoyalSechaba Holdings and Rebserve Cleaning. These
businesses contributed nearly 19% of the Group`s revenue (31 December 2006:
17%). Revenue grew 11% to R316 million for the period under review.
RoyalSechaba`s performance for the six month period was below expectation,
primarily due to the pressures of rising food inflation, but ahead of the
corresponding period due to new business gained in its remote sites
management business. Cost reductions to the overhead base of RoyalSechaba
are being implemented to improve overall returns with an aim of restoring
the operating margin of the business to at least 5% (currently at 3%).
Rebserve Cleaning performed ahead of expectation due to better than expected
performance in its industrial cleaning division. This new division is a
strategic initiative to add a higher margin business to the existing Berco
and Mediguard brands, where margins are under intense competitive pressure.
Rebserve Cleaning is also looking for strong growth in the hospitality
division which focuses on the leisure market.
Gaming services
A good performance was also recorded by Zonke Monitoring Systems as the
rollout of limited payout machines (LPM`s) accelerated during the period
under review. The number of machines being monitored by 31 December 2007 was
around 4,000, 26% up from 30 June 2007. Zonke has an exclusive contract with
the National Gambling Board to monitor LPM`s in South Africa, and is
currently active in the Western Cape, Mpumalanga, Limpopo and the Eastern
Cape. The remaining provinces, including Gauteng, are expected to award LPM
licenses within the next two years. An announcement made by the Gauteng
Gambling Board in November 2007 inviting interested parties to apply for LPM
operator licenses in Gauteng is a positive development.
It is expected that Gauteng will ultimately contribute nearly 5,000 LPM`s to
the national industry. The concomitant effect on Zonke`s profitability will
be significant.
Financial services
The Group anticipated that Novare Holdings would contribute approximately
10% of the Group`s operating profit for the current period, but was unable
to meet this target due to adverse financial market conditions. The
actuarial consulting division performed in line with expectation.
Novare Holdings incorporated a subsidiary in Botswana during the period
under review, and is currently in discussions to expand its geographical
reach to the asset management industry in Nigeria. This may entail a
strategic equity investment, and also the provision of actuarial consulting
services. The opportunity to participate in a new market and to increase
annuity earnings is attractive.
Franchising
The Group has commenced a substantial investment programme with the aim of
vertically integrating the distribution model of its King Pie franchise
business. This investment entails purchasing production rights from existing
King Pie franchisees and investing in a central production facility for King
Pie in Midrand, Gauteng. It is anticipated that the total capital
expenditure of this programme will be in excess of R100 million, with R22
million of this total amount spent during the period under review.
Operating profitability for the period under review is at break-even, in
line with expectation. The full benefits of central production are expected
to flow from July 2008.
The main objective of the vertical integration model is to unlock value from
the current franchising system. This value is shared between King Pie and
the franchisees. At present there are 330 King Pie quick service restaurants
in South Africa, Canada, Australia and Malaysia. Growth in this relatively
inexpensive entry point into business ownership is expected to be strong
over the next five years.
Other services
Other services, comprising Trollope Mining Services (open cast mining) and
Contract Forwarding (freight forwarding) performed in line with expectation.
These businesses contributed 17% to the Group`s revenue (31 December 2006:
15%). Revenue grew by 16% to R289 million in the current period, and
contribution to operating profit grew by 33% to R24 million on the back of a
good performance from Trollope Mining Services due to accelerated demand for
coal.
Financial review
The net loss before tax amounted to R526 million after accounting for net
interest received of R36 million and a R8,5 million amortisation charge for
the redeemable option-holding shares issued to directors and employees as
part of the Company`s Broad Based Black Economic Empowerment ("BEE")
initiative on 19 June 2007.
The downward adjustment on the fair value of investments contributed to
R92,7 million of the total R98 million reversal of deferred tax provided in
the previous periods which was set off against normal tax of R29 million.
A dividend of R15 million was paid to preference shareholders which,
together with the net loss attributable to outside shareholders of R72
million, resulted in a net loss attributable to ordinary shareholders of
R402 million.
The weighted average number of ordinary shares in issue decreased by 9% from
442 million ordinary shares at 31 December 2006 to 423 million ordinary
shares at 31 December 2007 as a result of the share buy-back programme.
An adjustment to the conversion price of the preference shares to R9,53 per
share from R10,00 per share was released on SENS (20 December 2007) in line
with the terms of the offering circular issued to Mvela Group shareholders
on 4 November 2005. This has resulted in an increase of 2,7 million ordinary
shares to be issued to preference shareholders. This has thus increased the
total number of ordinary shares to 474 million whilst the fully diluted
number of ordinary shares increased to 598 million. This dilution is as a
result of the increased dividends paid to ordinary shareholders ahead of
those projected in the offering circular dated 4 November 2005.
Outstanding capital balances in respect of non-recourse funding contained in
special purpose vehicles (which are not classified as subsidiaries of Mvela
Group) relating to the original acquisitions of certain investments by Mvela
Group, increased to R479 million at 31 December 2007 from R468 million at 30
June 2007 and R422 million at 31 December 2006.
Strategic review and objectives
Mvela Group is committed to its strategy of growing shareholder value (as
measured primarily by intrinsic net asset value) through the combination of
quality investments and cash generative operations.
The Group`s operations are a key element of the strategy and will provide
the Group with free cash flow which can be used in its investing activities.
The Group seeks to maintain a balanced exposure through its investments and
operations in the following five key growth sectors of the South African
economy which it believes will outperform the market in the medium to long
term:
- Financial Services
- Consumer Industries
- Construction and Infrastructure
- Non-Mining Resources and Energy
- Telecoms, Media and Technology
These five pillars will underpin the Group`s growth strategy going forward.
The Group continues to identify and pursue potential investment targets in
its targeted sectors with a view to concluding one or two material, value
enhancing investment transactions per annum.
Mvela Group is committed to achieve an optimal return on capital employed by
acquisitions and organic growth as well as share buy-backs.
Accounting policies and International Financial Reporting Standards ("IFRS")
The results for the six months ended 31 December 2007 have been prepared in
accordance with IFRS. The accounting policies used are consistent in all
respects with the accounting policies applied in the financial statements
for the year ended 30 June 2007.
Capital Reduction
The directors of Mvela Group have resolved to declare a capital reduction
out of share premium in lieu of an interim dividend, of 6 cents per ordinary
share, to ordinary shareholders. The last day to trade "cum" the capital
reduction in order to participate in the capital reduction is Friday, 28
March 2008. The ordinary shares of Mvela Group will commence trading "ex"
the capital reduction from the commencement of business on Monday, 31 March
2008 and the record date will be Friday, 4 April 2008. The capital reduction
will be paid to ordinary shareholders on Monday, 7 April 2008. Ordinary
share certificates may not be dematerialised or rematerialised between
Monday, 31 March 2008 and Friday, 4 April 2008, both days inclusive.
Preference Dividend
The directors of Mvela Group have resolved to declare a cash preference
dividend (No.5) of 27,6 cents per preference share to preference
shareholders. The last day to trade "cum" the preference dividend in order
to participate in the preference dividend is Friday, 28 March 2008. The
preference shares of Mvela Group will commence trading "ex" the preference
dividend from the commencement of business on Monday, 31 March 2008 and the
record date will be Friday, 4 April 2008. The preference dividend will be
paid to preference shareholders on Monday, 7 April 2008. Preference share
certificates may not be dematerialised or rematerialised between Monday, 31
March 2008 and Friday, 4 April 2008, both days inclusive.
Share Buy-Backs
The company is trading at a substantial discount to its intrinsic net asset
value. The board of Mvela Group has approved a share buy-back programme to
acquire at least 10% of the Group`s issued ordinary share capital in terms
of the general authority granted by the shareholders. The Group has thus far
bought back 25 789 539 ordinary shares which is just less than 6% of the
issued ordinary share capital. Announcements in line with the JSE Listing
Requirements will be made by the Group when it successfully acquires 6% and
9% of the issued ordinary share capital.
Prospects
The year 2008 will be a challenging year for South Africa, given the lack of
liquidity in world equity markets, South Africa`s current account deficit
and a flight of capital away from emerging markets. This has been evidenced
in the reduced funding capacity in a number of financial institutions in the
past two months.
Mvela Group is well placed with a strong balance sheet and healthy cash
flows from its operations (as well as available cash resources) to pursue
value enhancing investment opportunities through acquisitions in terms of
its strategic investment framework. The Group will also continue with its
share buy-back programme to further improve shareholder returns.
SUMMARISED GROUP BALANCE SHEET
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
R`000 R`000 R`000
ASSETS
Non-current assets 5 496 705 5 177 672 6 002 052
Property, plant and equipment 437 324 393 853 389 618
Intangible assets 819 011 770 637 799 591
Investments in associates 12 107 11 845 11 215
Other investments 4 179 937 3 976 227 4 751 455
Deferred taxation 48 326 25 110 50 173
Current assets 1 467 522 2 089 517 1 997 238
Liquid funds 804 230 1 422 482 1 355 431
Short-term investments 11 717 - 16 101
Other current assets 651 575 667 035 625 706
TOTAL ASSETS 6 964 227 7 267 189 7 999 290
EQUITY AND LIABILITIES
Capital and reserves 5 286 705 5 550 889 6 000 490
Share capital and reserves 5 050 759 5 259 593 5 689 390
Minority interests 235 946 291 296 311 100
Non-current liabilities 963 041 837 322 1 038 148
Interest bearing liabilities 431 622 319 199 407 970
Non-interest bearing liabilities 2 501 2 801 1 400
Deferred taxation 528 918 515 322 628 778
Current liabilities 714 481 878 978 960 652
Interest bearing liabilities 102 244 151 679 101 620
Non-interest bearing liabilities 612 237 727 299 859 032
TOTAL EQUITY AND LIABILITIES 6 964 227 7 267 189 7 999 290
Net number of ordinary shares in 416 641 442 345 433 178
issue (000)
Diluted net number of ordinary 474 039 497 045 487 878
shares in issue (000)*
Fully diluted net number of 598 464 497 045 612 303
ordinary shares in issue (000)**
Net asset value per ordinary 1 065,5 1 058,2 1 166,2
share (cents)
Net tangible asset value per 882,5 898,1 992,0
ordinary share (cents)
Fully diluted net asset value 844,0 1 058,2 1 284,8
per ordinary share (cents)
Fully diluted net tangible asset 699,0 898,1 1 146,0
value per ordinary share (cents)
* Calculated on the basis that all preference shares will be converted into
ordinary shares after November 2009.
** Calculated on the basis that all preference shares and BEE shares will be
converted into ordinary shares in accordance with their terms.
SUMMARISED GROUP INCOME STATEMENT
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 December 31 December 30 June
2007 % 2006 2007
R`000 change R`000 R`000
Revenue 1 699 926 1 1 688 458 3 461 586
Profit from operations 125 450 3 121 570 241 625
Fair value adjustments (679 461) (174) 917 698 1 499 523
and net (loss)/profit
from investments
Income from associates 707 838 669
Net interest 36 050 39 856 80 905
received/(paid)
Cost of BEE transaction
and share appreciation
rights (8 524) - (72 328)
Net (loss)/profit (525 778) (149) 1 079 962 1 750 394
before taxation
Taxation expense 66 192 (253 859) (382 943)
Normal, deferred, 68 724 (252 178) (378 826)
capital gains and
foreign tax
Secondary tax on (2 532) (1 681) (4 117)
companies
Net (loss)/profit after (459 586) (156) 826 103 1 367 451
taxation
Attributable to:
Ordinary shareholders (402 260) 737 847 1 237 092
Other shareholders (57 326) 88 256 130 359
- Preference 14 919 14 919 30 085
shareholders
- Minority interests (72 245) 73 337 100 274
(459 586) (156) 826 103 1 367 451
Weighted average net 422 536 442 333 441 518
number of ordinary
shares in issue (000)
Diluted weighted
average net number of
ordinary shares
in issue (000) * 479 934 497 033 496 218
Fully diluted weighted
average net number of
ordinary shares
in issue (000) ** 604 359 497 033 620 643
(Loss)/earnings per (95,2) (157) 166,8 280,2
ordinary share (cents)
Headline (95,2) (151) 187,0 304,8
(loss)/earnings per
ordinary share (cents)
Diluted (loss)/earnings (80,7) (153) 151,5 255,4
per ordinary share
(cents)
Diluted headline (80,7) (148) 169,4 277,2
(loss)/earnings per
ordinary share (cents)
Fully diluted (53,2) (135) 151,5 225,3
(loss)/earnings per
ordinary share (cents)
Fully diluted headline (53,2) (131) 169,4 242,8
(loss)/earnings per
ordinary share (cents)
Distribution/dividend 6,0 6,0 22,0
per ordinary share
(cents)
- Interim 6,0 6,0 6,0
- Final - - 16,0
Dividends per 27,6 27,7 55,0
preference share
(cents)
- Interim 27,6 27,7 27,7
- Final - - 27,3
* Calculated on the basis that all preference shares will be converted into
ordinary shares after November 2009.
** Calculated on the basis that all preference shares and BEE shares will
be converted into ordinary shares in accordance with their terms.
SUMMARISED GROUP CASH FLOW STATEMENT
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
R`000 R`000 R`000
Profit from operations 125 450 121 570 241 625
Non-cash items 67 532 60 909 128 578
Working capital changes (130 153) (123 955) (41 930)
Cash generated from operations 62 829 58 524 328 273
Net interest received/(paid) 36 050 39 856 80 905
Investment Income 5 345 85 11 590
Normal taxation paid (67 525) (46 602) (80 951)
Cash available from operating
activities
before capital gains tax 36 699 51 863 339 817
Capital gains tax paid (61 044) - -
Cash (utilised)/available from (24 345) 51 863 339 817
operating activities
Cash effects of investing (233 653) 929 498 734 420
activities
Cash effects of financing (274 559) (69 372) (217 858)
activities
Dividends paid - preference (14 919) (14 919) (30 085)
shareholders
Net movement in cash and cash (547 476) 897 070 826 294
equivalents
Cash and cash equivalents at the 1 351 706 525 412 525 412
beginning of the period
Cash and cash equivalents at the 804 230 1 422 482 1 351 706
end of the period
SUMMARISED GROUP STATEMENT OF CHANGES IN EQUITY
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
R`000 R`000 R`000
Balance at the beginning of the 6 000 490 4 793 810 4 793 810
period
(Disposal)/acquisition of
investments,
subsidiaries and businesses (11) - (480)
Shares issued/bought back (175 149) 3 067 (105 175)
Cost of BEE transaction 7 310 - 65 375
Net (loss)/profit after taxation (459 586) 826 103 1 367 451
Distribution/dividends (86 349) (72 091) (120 491)
Balance at the end of the period 5 286 705 5 550 889 6 000 490
RECONCILIATION BETWEEN NET PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS AND
HEADLINE NET PROFIT ATTRIBUTABLE TO ORDINARY SHAREHOLDERS
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
R`000 R`000 R`000
Net (loss)/profit attributable (402 260) 737 847 1 237 092
to ordinary shareholders
Disposal/Impairment of 3 025 91 016 109 698
investments and subsidiaries
Profit on sale of property, (3 158) (1 609) (1 212)
plant and equipment
Headline net (loss)/profit (402 393) 827 254 1 345 578
attributable to ordinary
shareholders
SEGMENTAL INFORMATION
Unaudited Unaudited Audited
six months six months year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
R`000 R`000 R`000
NET ASSETS
Operations 1 266 043 1 067 412 946 296
Investments 4 020 662 4 483 477 5 054 194
5 286 705 5 550 889 6 000 490
Revenue
Operations 1 699 926 1 688 458 3 461 586
